As used in defining the modified accrual basis of accounting, the term "available" means
A)received in cash.
B)will be received in cash within 60 days after year-end.
C)collection in cash is reasonably assured.
D)collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period.

Question

Quizplus · Accepted Answer

"Available" in the context of modified accrual basis of accounting means that the revenue must be collected within the current period, or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. This means that the revenue must be both measurable and available to finance current-period expenditures. Option D correctly captures the essence of this concept. Option A and B are incorrect because cash receipt does not determine availability for accounting purposes. Option C is also incorrect because "reasonably assured" is not a precise enough term to determine availability.

As Used in Defining the Modified Accrual Basis of Accounting